The Basics of Interest (Part Three)
Compound Interest
Compounding interest can be a great way to increase your finances in shorter time period or beyond your originally desired amount. To understand the advantages of compound interest you must understand how it can work for you or against you. Compound interest is used in many ways by banks. It is used to calculate the interest rates on your savings account as well as the amount of interest they will charge for a loan. Of course the interest you pay on your loan is going to be higher than the interest you earn on your savings account or CD from the bank. This is the way the banks make money. They pay you a certain amount of interest on your savings that will attract you to put money into your account and then they use the money in your savings account as a loan to another customer and have them pay a higher interest rate than what you are earning therefore making a profit.
*TIP: the current interest rate on loans and the interest rate on CD usually go hand in hand. If the interest rate on a CD goes up the interest rate on loans are sure to follow*
Either way compounding interest can help you to multiply your savings. Here’s how it works. Let’s say you put $10,000 into a savings account that pays a 4 percent interest. At the end of the year you would have a total of $10,400 in your savings account. This can be figured by using:
Future Value = Present Value x (1 + interest rate)^n
Where n is the number of years you are saving it.
However, if you are dealing with compounding interest the answer gets a bit more complicated but a lot higher. Compounding interest factors in the interest rate, the amount invested, the length of the investment and the periodic payments of interest. The basis of compound interest is putting your money to work for you. With compounding not only is your money earning interest but your interest is earning interest as well. When your interest earns interest you can begin to create an abundant financial future.
Starting a savings plan with compound interest early is a good way to increasing your finances. The longer you allow compound interest to work to better it will work for you. If you were unable to start saving at a younger age it is still ok to start now. Just know that you will have to make it a point to invest large sums so that you can get a higher return.
Related posts:
114 Comments
Discussion | Share Feedback
You must be logged in to post a comment.
[...] presents The Basics of Interest (Part Three) posted at Personal Finance Ology, saying, “Compound interest, make it work for you, not against [...]
Millionaire Mind and Making Money Blog Carnival No. 8…
Welcome to this weeks edition of millionaire mind and making money online. Id like to present some interesting articles from my fellow finance and investment blogger friends.
Lets start with some resume advice. In todays climate a CV could be the key t…
[...] presents The Basics of Interest (Part Three) posted at Personal Finance Ology, saying, “Compound interest, make it work for you, not [...]
[...] presents The Basics of Interest (Part Three) posted at Personal Finance Ology, saying, “Compound interest, make it work for you, not [...]
There was an error submitting your comment. Please try again
very good i favorites
Hey this is a great post. I’m going to email this to my buddies. I stumbled on this while googling for some lyrics, I’ll be sure to come back. thanks for sharing.
It is nice to find a site about my interest. My first visit to your site is been a big help. Thank you for the efforts you been putting on making your site such an interesting and informative place to browse through. I’ll be visiting your site again to gather some more valuable information. You truly did a good job.
That was exactly what I was looking for. You have done a wonderful job communicating your message. Keep up the good work.
Thanks for sharing such an interesting post with us. I like the way you express every thing.
You’ll be able to even imitate how it was said, generating it a special valentine gift.
There is noticeably a bundle to learn about this. I assume you made sure nice points in features also.
I believe Canada goose clothing will help you a lot during the winter season. Don’t mention the quality and basic functions of canada goose parkas. If you learn about Canada goose clothes, you will never worry about the above mentioned. Today we are going to talk about the design of Canada goose coats. Different from those traditional coats, Canada goose clothing looks stylish, cool, soft, charming and light. That is just one of the reasons why Canada goose label can surpass other brands of winter coats. So why not buy Canada goose for yourself? (yang)
I wanted to thank you for this great blog,I will surely be back again to look at some other significant posts that you have in future.
We can see many funny things on the internet. This is also one of them.
This articles helps me more.Thanks for your sharing,I will pay more attentions to your blog. Looking forward to your better and better articles.See you next time.
He is not laughed at that laughs at himself first.
I guess I am not the only one having all the enjoyment here! keep up the good work.
Thanks for turning out to be well considerate as well as for deciding upon this kind of excellent ideas most people are really eager to be aware of. My personal honest apologies for not expressing gratitude to you sooner.
It’s so funny that so many people are complaining about an event…not every event you attend is going to be exactly as you’d like it to be.
which i have done today through pdf format.Your blog is very much useful and rocking dear. you have provided detailed knowledge and information about today’s latest technologies, online communications and other businesses.
Find your blog in google,i am so pleased that you shared your story with us polo t shirts,
In fact your creative writing ability has inspired me.
I enjoyed reading your articles. This is truly a great read for me. I have bookmarked it and I am looking forward to reading new articles. Keep up the good work!
When planning your trip you need to remember range things
but finding out how to carry your necessities to you is an important detail that you choose to shouldn’t skimp on
When using the right travel bags will keep your items go to your destination in one piece
I have read a number of posts of yours, but this is the one that I like the most. So expecting some more ideas from your side. Thanks !
considerate as well as for deciding upon this kind of excellent ideas most people are really eager to be aware of. My personal honest apologies for not expressing gratitude to you sooner.
f you learn about Canada goose clothes, you will never worry about the above mentioned. Today we are going to talk about the design of Canada goose coats. Different from those traditional coats,
I stumbled on this while googling for some lyrics, I’ll be sure to come back. thanks for sharing.
considerate as well as for deciding upon this kind of excellent ideas most people are really eager to be aware of. My personal honest apologies for not expressing gratitude to you sooner.
That is very kind of you to write this share for us, thanks a lot. dgrh
It seems like every time you turn around there is someone there with tips for having great skin, but not all of the advice they are supplying is everything it’s cracked up to be.
I don’t know what to say except that I have enjoyed reading. Nice blog. I will keep visiting this blog very often
Wonderful site, where did you come up with the information in this article? I’m happy I found it though, ill be checking back soon to see what other articles you have.
I found your blog on Yahoo and I just wanted to say that I think your writing is simply stunning! Thanks again for providing this content for free
Your article write very well.
Wonderful information here. This fascinating put up made me smile. Perhaps for those who throw in a couple of footage it would make the entire thing more interesting. Anyway, in my language, there aren’t much good source like this.
http://www.guccioutletgogo.com
This is really interesting, You are a very skilled blogger. I have joined your feed and look forward to seeking more of your fantastic post. Also, I have shared your web site in my social networks!
A great post but How to select a cool handbags. we sell cheap handbags We are the best store provided various cheap designer handbags but only a little white to make coach handbags online
thank you for sharing,this information is useful to me.good quality
Best stylejordan shoes for sale plus exciting price makes the perfect air Jordan shoes that we offer.Maybe it is just a simple pair of shoes,but almost every air Jordan shoes Michael jordan shoes has its deep meaning.Air Jordan 1 is made by Nike and was Jordan’s air jordan shoes first shoe which is what makes it such an iconic shoe.Air Jordan XI is awesome cheap jordan shoes and worn by Jordan when he made his comeback and won his championship,etc.So what are you waiting for,Go Nike Zoom Kobe and grab your own pair of Jordan Sneakers and enjoy your game,exhibit your own style and your air jordan 2011 attitude toward the basketball and sports.
. Very glad to see this article.
This is a great post. you got cheap shoes online .I like cheap designer shoes as well give you designer shoes outlet
I am visiting this site first time & it has awesome information. I have come to know a lot of information after visiting this site. Keep this sort of posting in future as well.
I really appreciate the effort you have given to this post. I am looking forward for your next post. I found this informative and interesting blog. I just hope you could make another post related to this.
It’s always good to get useful information like you share for blog posting.
thanks for the info.
I stumbled on this while googling for some lyrics, I’ll be sure to come back. thanks for sharing.givenchy
http://www.shoes-hats-store.com/
I have read your article ,i think your article is very good and i am very like it. Thank you!
Took me awhile to read all the comments, but I really enjoyed the article. It proved to be very useful to me and I am sure to all the commenters here! It’s always nice when you can not only be informed, but also engaged! I’m sure you had fun writing this article
For me as a reader is a pleasure to give congratulations to the creators of this article is fabulous, I think that long ago I have no chance to see a blog with such interesting topics and so popular, I think it’s great to have had the delicacy to share with readers this information.
A very warm greeting to all readers, thank you very much for allowing us to express ourselves in her blog, I am a complete pleasure to have the opportunity to have such a fabulous read an article like this, I think the world should do more awareness about what our children read on the Internet, issues like in this article are those who can create in the young a better neurological performance.
Thanks for sharing
This articles helps me more.Thanks for your sharing,I will pay more attentions to your blog. Looking forward to your better and better
articles.See you next time.
wise head makes a close mouth.
A man cannot whistle and drink at the same time
Be slow to promise and quick to perform
Talking mends no holes
At the other end of the spectrum, pale, sandy shades were also a hit on the red carpet. Sandra Bullock in light pink embellished Jenny Packham one shoulder gown , Leighton Meester in beige printed Burberry Prorsum dress with long sleeves, Scarlett Johansson in a nude Elie Saab gown with cape sleeves, Dianna Agron in off-white pleated beaded strapless gown with peplum from J. Mendel.
The opportunity to purchase Pandora appeal bracelets from Pandora jewellery sale comes only for a minimal time period. When the sale period is above then you definitely should watch for practically for to 6 months and at times for practically one 12 months in order that the following sale provide arrives and also you may be able to buy the pandora chrams.The most beneficial concept is always that just conserve your income and watch for the time?sale to get the Pandora allure bracelets of your respective alternative.
Took me awhile to read all the comments, but I really enjoyed the article. It proved to be very useful to me and I am sure to all the commenters here! It’s always nice when you can not only be informed, but also engaged! I’m sure you had fun writing this article
A very warm greeting to all readers, thank you very much for allowing us to express ourselves in her blog, I am a complete pleasure to have the opportunity to have such a fabulous read an article like this, I think the world should do more awareness about what our children read on the Internet, issues like in this article are those who can create in the young a better neurological performance.
Hello, We searched for this web site upon Google and wanted to state thanks for the superb read. I would have to agree with it, thank you once again!
NHL is the topmost level professional ice hockey competition in the world. As one of the biggest professional movements in the North America, NHL has been gave much attention. The fans all over the world wear the NHL jerseys as their favorite teams to show their pride. What about you? May be you also need a NHL jersey to make other know the team you love and talk with your friends.
From Sunrise and sunset,permanence is the river of time. Back in the million years ago, humans have learned to observe and control the time of the operation of the law. From the corona to the atomic clock, the human mastery of time and measurement methods had changed more and more science, sophisticated. watches replica real development is from the beginning of the 16th century and spread knowledge of science and technology. With the timer design, improvement, manufacture and spread, the clock have being started around our side and along with the progress of human society have being progressed. It not only improve our way of life, but aosl their own is fine art and Priceless. As watch enthusiasts should know that clock follow the time’s the tracesin in the footsteps.
Substantially, the post is actually the sweetest topic on curing acne naturally. I concur with your conclusions and will thirstily look forward to your future updates. Just saying thanks will not just be sufficient, for the tremendous lucidity in your writing.
I have read a number of posts of yours, but this is the one that I like the most. So expecting some more ideas Discount Oakley Sunglasses from your side. Thanks !Wonderful site, where did you come up with the information in this article? I
Thanks for the write up! This is really some great stuff here! When you are tired of boring formal clothes, True religion jeans outlet shirts that always set leisure and comfort as the concept will be your good alternative.
Thanks for your opinion. I totally agree with it. I like cheap uggs oulet also.B
I am also interested in this topic. I have spent a lot of time on searching this kind of topic. It is very informative.
http://www.cheaphatcaps.com
wxxI have been surfing on the web a lot more than three hours today,
nonetheless I never found any interesting content like yours.
It is quite worth sufficient for me. In my opinion,
if all webmasters and bloggers made excellent content material as you did,
the web are going to be far more useful than actually before.
Nice one, there is actually some good facts on this blog some of my friends may find this worthwhile, will send a link, thanks.
I am a blog beginner. I am also interested in such kind information. You provide me a good example. Thanks very much. I will keep on reading your blogs.
Hi,thanks for your post and luckly to comment in your site!Clip on sunglaSunglasses Shop can be found in all kinds of colours. Nobody loves their designer sunglasses more than celebrities, and in general most teenagers want to look like their favorite movie star or pop idol. Recently, apparent Ray ban sunglasses in copycat variations have turn into genuinely popular, instead belonging in the direction of formerly standard eye-hiding dim shades. If you are looking for low cost sunglasses that are replicas of famous brands, you might find something of interest to you in iVision Canada. UK clip on sunglasses directory - Offering UK products from United Kingdom manufacturers, suppliers, wholesalers & distributors at TradeKey. If your frame of sunglasses at low cost is plastic, keep reading to see if it contains a metal bar. Any explanatio Chanel sunglasses n, JiYunSheng tsukihime move can don”t want to hear it, no matter what happens.
I am always searching online for articles that can help me get further ahead. Thanks a million!
I would like to thank you for the efforts you have made in writing this article.
Your blog appears quite informative. I liked it. So much useful material. I read with great interest.Can you please tell me how can I read your rss blog?
Thanks for a great post and interesting comments. I found this post while surfing the web for Thanks for sharing this article.
Bash Parts is offering the “Best involving British” variety with all the current components to hold a conventional
discount montblanc pens
wow..its a great fun here….which i have done Northface outlet today through pdf format. Your blog is very much useful and rocking dear. you have provided detailed know ledge North face and information about today’s latest technologies, online communications and other businesses.
Good luck to the author! all the best! Shopping the sport clothing are very hard to find Oakley Sunglasses Outlets ,the brand are the best suit to travel,and when you learn about the Cheap Oakley Sunglasses product,you will like very much.
Nice Post. It’s really a very good article. I noticed all your important points. Thanks
I love your article. It can help me get much useful information. Hope to see more words in it. I think you will have interests to see
There is a huge selection to select from, with jackets in different colors, styles, and designs.
http://www.chiflat-iron.com/
North Face Coats are very inexpensive, together with the old ones are definitely worth buying.
50% Discount alinfljerseys with free shipping.We provide many kinds of jerseys,including nfl jerseys,nba jerseys,mlb jerseys,nhl jerseys,Best price and 100% quality!Buy jerseys heels now!,
- http://www.alinfljerseys.com welcome you.
Thanks for your sharing….nice post
An awesome blog this is,and a great source to get updated by some of the greatest facts,the work you did in order to implement this,is absolutely magnificent. .If you need some fashion jean ,welcome to visit our website .
http://www.fashionjeanshop.com/
Thanks For This Post, was added to my bookmarks
I am not much into reading, but somehow I got to read nice information on your site. Simple to understand and helpful. We will look forward for your future updates.Thanks!
I’m looking to create my own blog and would like to find out where u got this from. many thanks.
An excellent article to improve people’s quality, enhance the knowledge of the grade, I really like this article, and thank you for sharing!
wuwu!I just wanted to comment your blog and say that I really enjoyed reading your blog post here
This is a good article which offers some helpful information for me,thank you!Welcome to visit myTrue religion jeans outlet.
You can share some of your article, I’m like you write something, really very good! I will continue to focus on. Never done in the article comments, this is my first network comments, appreciate you sharing.
Thanks very much, I like this post very much.
thanks for sharing such informative and fantastic post..
Welcome to my shopwww.haomaoyi88.com
On the internet there are many online stores that offer wholesale new era hats, but it is the best. In serving customers, it always put the best service and they only sell the cheap hats with the best quality. You will be pampered with a wide range of choices, many cheap new era hats offered by http://www.haomaoyi88.com, such as rockstar hats,red bull new era hats, new era 59fifty hats,caps new era,red bull energy hats,New Era Hats Wholesale,Monster Energy Hats,dc shoes hats,and many more.www.haomaoyi88.com
The nomination of the winner depends on the capability and spirit of the personality to finish the race.I like the post very much as it contain informative in knowledge.I like pics of Chelsea shares of the beauty of running in Madison, Wisconsin.I want to congratulate the winner for the nomination race.I want to know suggestion from others.
You can share some of your article, I’m like you write something, really very good! I will continue to focus on. Never done in the article comments, this is my first network comments, appreciate you sharing. Very good article
be treated with it to calm and soothe the skin in addition to killing any potential germs which might
inflame the situation. Any itchiness caused by the rash can be eased by application of jojoba oil as well.
From Sunrise and sunset,permanence is the river of time. Back in the million years ago, humans have learned to observe and control the time of the operation of the law. From the corona to the atomic clock, the human mastery of time and measurement methods had changed more and more science, sophisticated. watches replica real development is from the beginning of the 16th century and spread knowledge of science and technology. With the timer design, improvement, manufacture and spread, the clock have being started around our side and along with the progress of human society have being progressed. It not only improve our way of life, but aosl their own is fine art and Priceless. As watch enthusiasts should know that clock follow the time’s the tracesin in the footsteps.
Great post, thank you very much, please write more and more about this. Very interesting.d and understand.abcd
. I really like the way you show to us, very wonderful and powerful about your article, and good to read it, please keeping it doing. http://www.airmaxesvip.com
You can share some of your article, I’m like you write something, really very good! I will continue to focus on. Never done in the article comments, this is my first network comments, appreciate you sharing.
I really like this information!Thanks! Your article is wonderful,can you tell me how did you do it?Your blog is wonderful,I like it very much.
I wonder how you got so good. This is really a fascinating blog, lots of stuff that I can get into.true religion sale
I am surprise to look your article. Your article is very creative that it is what I want to get.jordan retro 11 cool grey
That was interesting.I like your quality that you put into your post.Please do continue with more like this.
Excellent, but it would be better if in future you can share more about this subject. Keep posting.
http://www.ocheapoakleys.com
The website give me some useful information, I like it very much and hope that it can be done better and better.